Correlation Between StoneCo and Zscaler
Can any of the company-specific risk be diversified away by investing in both StoneCo and Zscaler at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining StoneCo and Zscaler into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between StoneCo and Zscaler, you can compare the effects of market volatilities on StoneCo and Zscaler and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in StoneCo with a short position of Zscaler. Check out your portfolio center. Please also check ongoing floating volatility patterns of StoneCo and Zscaler.
Diversification Opportunities for StoneCo and Zscaler
Good diversification
The 3 months correlation between StoneCo and Zscaler is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding StoneCo and Zscaler in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zscaler and StoneCo is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on StoneCo are associated (or correlated) with Zscaler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zscaler has no effect on the direction of StoneCo i.e., StoneCo and Zscaler go up and down completely randomly.
Pair Corralation between StoneCo and Zscaler
Given the investment horizon of 90 days StoneCo is expected to under-perform the Zscaler. In addition to that, StoneCo is 2.06 times more volatile than Zscaler. It trades about -0.05 of its total potential returns per unit of risk. Zscaler is currently generating about 0.29 per unit of volatility. If you would invest 18,700 in Zscaler on August 28, 2024 and sell it today you would earn a total of 2,342 from holding Zscaler or generate 12.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
StoneCo vs. Zscaler
Performance |
| Timeline |
| StoneCo |
| Zscaler |
StoneCo and Zscaler Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with StoneCo and Zscaler
The main advantage of trading using opposite StoneCo and Zscaler positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if StoneCo position performs unexpectedly, Zscaler can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Zscaler will offset losses from the drop in Zscaler's long position.| StoneCo vs. Oneconnect Financial Technology | StoneCo vs. Global Business Travel | StoneCo vs. Alight Inc | StoneCo vs. CS Disco LLC |
| Zscaler vs. GigaCloud Technology Class | Zscaler vs. Arqit Quantum | Zscaler vs. Cemtrex | Zscaler vs. Paysafe |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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